Trump tweets China will cut tariff on U.S.-made cars

Donald Trump hails 'amazing and productive' talks, as US agrees to suspend new China tariffs for 90 days

US and China 'will impose no new tariffs'

The United States has slapped steep tariffs on Chinese goods valued at $250 billion since the beginning of July, while China has retaliated with reciprocal tariffs on $110 billion worth of U.S. goods.

US President Donald Trump (R) and China's President Xi Jinping (L) along with members of their delegations, hold a dinner meeting at the end of the G20 Leaders' Summit in Buenos Aires, on December 01, 2018.

"You're going to see a ton of volatility", suggested Nate Thooft, a senior portfolio manager at Manulife Asset Management.

Stocks soared last week, with the S&P 500 rising almost 5 percent for the week.

"What he's saying to his own people has more long-term validity than what he's saying to Trump over dinner for the sake of everyone saving face", Khanna said.

But as trade tensions ratcheted up with the U.S. this summer, Beijing retaliated by slapping vehicles imported from the United States with an extra 25 per cent tariff, bringing the total tariff rate to 40 per cent.

Instead, the Americans and Chinese officially lauded the result.

The both leaders also agreed to start negotiations on structural changes "with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture". According to an earlier Bloomberg report, most fentanyl found in the U.S.is manufactured in China.

China has agreed to "reduce and remove" tariffs below the 40% level that Beijing is now charging on United States cars, Donald Trump has claimed, amid a trade war truce agreed by the two countries.

"It's not solved by any stretch of the imagination", said Thooft.

Contrast that with the US statement, which focused more narrowly on the truce's benefits for its side.

Across the Europe stock market, the FTSE 100 was up by 144.12 points, or 2.06 percent.

USA officials say China unfairly uses subsidies and other tactics to flood U.S. markets with goods too cheap for American companies to compete with, including steel and aluminium.

What they agree on - or don't - will likely move markets up or down, determine whether the world economy gets some relief from destabilizing trade tensions and cast judgment on the wisdom of the American leader's hard-nosed trade tactics. But U.S. crude oil was up 2.7 percent to $52.37 a barrel as of 6:07 p.m. EST (2307 GMT) on Sunday.

Wall Street followed rallies in markets around the globe. Federal Reserve Chairman Jerome Powell's testimony to Congress scheduled for Wednesday has been canceled.China November trade data is due on Saturday.

Last week, Powell backed the Fed's gradual tightening but said its policy rate was "just below" a range of estimates of the so-called neutral level that neither stimulates nor cools growth.

But the highly anticipated talks in Buenos Aires have produced a welcome consensus that the two sides will work on ways to resolve their differences.

Those comments came a day after special counsel Robert S. Mueller III revealed a new plea deal with Michael Cohen, Trump's former lawyer and "fixer". But it said the "United States reiterates its decision to withdraw from the Paris Agreement", mirroring the divergence seen past year when Trump shocked the global community by bucking the consensus at his first G20.

This amounts to a tactical pause, giving both sides time to work out the details, both of how China will in the short-term live up its promise to buy USA goods and, more seriously, how the two sides will resolve the fundamental philosophical differences that continue to divide them on trade. Still, concerns about the potential global damage that further tariff increases could wreak will be ― at least temporarily ― assuaged.

OPEC, Canada Make Moves to Raise Crude Prices
France considers introducing state of emergency after Paris riots